Blair promises action on US steel

US steel workers have lobbied vociferously

Prime Minister Tony Blair says that retaliatory action will be taken with the aim of reversing the US tariffs on steel imports "as soon as possible".

The official spokesman for Mr Blair, who wrote to and spoke on the telephone to US president George Bush last week, said the UK and EU believed the US action broke world trade rules.

The strength of the relationship is not whether we agree on everything, but whether we can handle issues like this

Downing Street on the US/UK relations

Trade and Industry Secretary Patricia Hewitt, who told the BBC she was "bitterly disappointed" with the tariffs, is to make a statement to MPs about the affair later on Wednesday.

She has already pledged that the UK would be working with the European Union to take protective counter-measures: "We won't stand by and simply let them dump their problems onto us."

The US move was announced as Plaid Cymru accused Labour Party backer Lakshmi Mittal and his LMN company of lobbying for import duties and "undermining" British interests.

Mr Mittal was at the centre of the 'Steelgate' row when it emerged he gave Labour £125,000 shortly before Tony Blair backed his takeover of a Romanian steel works.

'Painful process'

Attacking the US action Ms Hewitt said: "This goes completely in the wrong direction and we'll oppose it just as hard as we can."

US President George W Bush introduced the tariffs as part of a three-year plan to help the ailing US steel industry, which has been struggling to compete with cheaper products from abroad.

President Bush sparked anger in UK

Ms Hewitt said Britain and the EU would be complaining to the WTO.

She added: "We're going to stand by our steel producers, because our steel workers are now some of the most productive in the world. They have gone through a very painful process of restructuring.

"And it is frankly because the Americans have not been willing to go through the necessary process of restructuring and modernisation and making their industry more productive that they've got a problem now."

'US should set example'

Downing Street, while attacking the tariffs, said the row would not harm the "special relationship" between the UK and the US: "The strength of the relationship is not whether we agree on everything, but whether we can handle issues like this."

"We recognise the US steel industry has to restructure, but we do not believe it is in the interests of the world economy that it should impose tariffs," the spokesman said.

Free trade really means... global free trade, not American free trade

CBI director-general Digby Jones

"We believe that tariffs are against not only the interests of countries such as ours and Europe, but also against the interests of US consumers themselves."

Last year the US imported 27.4 million tonnes of steel, of which 500,000 tonnes was from the UK.

Confederation of British Industry director-general Digby Jones warned that US tariffs would put UK jobs in steel and other manufacturing firms at risk.

"The US should be setting an example to the world about what free trade really means. It means global free trade, not American free trade," he said.

'Declaration of war'

UK producer Corus, which sells about 5% of its products to the US, urged the European Union to mount protective counter-measures.

And it also blamed the US steel industry for creating the problems which led to the tariffs in the first place.

Tony Blair has written to Mr Bush and spoken to him on the phone

"US steel producers' problems are caused by a failure to restructure and consolidate, not by imports which actually declined by 20% in 2001," the spokesman said.

Nick Clegg, East Midlands Euro MP for the Liberal Democrats, said the move was "shocking" and an "a form of economic vandalism".

Union leader Bill Morris said: "The 30% tariff is a declaration of trade war on the UK and Europe steel industry."